Luke Horton

Luke Horton asked for a deeper dive into the assumptions and factors influencing the 2026 outlook, including organic growth, new campuses, and the continued hybrid learning rollout. He also sought an update on the East Point campus expansion timeline and potential for similar expansions or relocations at other existing campuses.

Answer

Scott Shaw, President and CEO, stated that continued trends are expected, with organic growth remaining meaningful, though potentially not at the same 2025 level. He highlighted new programs and campuses as key drivers for confidence in start guidance. Brian Meyers, EVP, CFO, and Treasurer, added that new campuses like Houston and Long Island are expected to contribute about 10% to revenue but will incur losses in 2026. Scott Shaw confirmed the East Point expansion will open later in 2026, primarily impacting 2027, and mentioned existing unbuilt space at Houston and Levittown for future growth, as well as plans to scale back collision programs at Melrose and Grand Prairie to expand electrical and HVAC.

Luke Horton inquired about the assumptions and factors influencing the 2026 outlook, focusing on organic growth versus new campuses and the continued hybrid learning rollout. He also asked for an update on the East Point campus expansion timeline and other potential opportunities for existing campus expansions or relocations.

Answer

President and CEO Scott Shaw stated that the 2026 outlook anticipates continued trends, with about half of the growth from organic business and meaningful contributions from new programs and campuses. He noted that the hybrid model drives efficiencies, with additional revenue dropping to the bottom line. EVP, CFO and Treasurer Brian Meyers clarified that new campuses like Houston and Long Island contribute to revenue but are not expected to add to profitability in 2026 due to initial losses. Scott Shaw added that the East Point expansion will open later in 2026, contributing more significantly in 2027, and mentioned unbuilt space at Houston and Levittown for future growth, along with plans to reallocate space at Grand Prairie similar to the Melrose campus.

Luke Horton of Northland Capital Markets questioned which programs were driving the strong student starts, especially at the East Point campus, and inquired about the planned program mix for future new campuses.

Answer

CEO Scott Shaw responded that at the East Point campus, all four programs—automotive, HVAC, electrical, and welding—are performing strongly. He confirmed that the strategy for the two new campuses planned per year is to replicate this successful model, combining automotive programs with skilled trades, as market research indicates strong demand for this mix.

Luke Horton asked for more specifics on the 'commercial execution shortfalls' in 2025, inquiring if they related to hiring, pricing, or sales cycles, and what changes have been made to the go-to-market organization for 2026 to improve win rates and pipeline conversion. He also sought clarity on the monetization strategy for AI Studio, specifically if it's seat-based, consumption-based, or premium tier pricing.

Answer

CEO Or Offer stated that the company was not satisfied with the yield from sales investments in 2025, attributing it to adding many salespeople quickly, which elongated ramp-up times and sales cycles, particularly for outbound enterprise efforts. He noted optimizations were made, and the company starts 2026 with a fully ramped team without needing further investment. Chief Business Officer Maoz Lakovski explained that AI Studio monetization is twofold: data access (aligned to customer needs for specific data sets) and data consumption (with a base package and growth options), emphasizing its strategic role in expanding user access within organizations and unlocking TAM through partnerships like Manus. Or Offer added that the model is similar to paying for business outcomes, not seat-based, and aims to drive adoption by removing language and expertise barriers.

Luke Horton sought specifics on 'commercial execution shortfalls,' including whether they related to hiring, pricing, or sales cycles, and the changes made to the go-to-market organization for 2026.

Answer

Or Offer (CEO and Co-Founder, Similarweb) explained that increasing sellers in 2025 led to disruption, long ramp-up times, and lower-than-expected yield, especially in enterprise and expansion. They optimized and tweaked the approach, now having the right talent for 2026. Maoz Lakovski (Chief Business Officer, Similarweb) added they are doubling down on growth opportunities like AI, LLMs, and OEM. Regarding AI Studio monetization, Maoz Lakovski stated it's twofold: data access and data consumption, with some consumption included in packages. Or Offer emphasized their focus on data access and consumption over seat-based pricing, aiming to drive adoption by removing barriers.

Luke Horton inquired if there has been any shift in the customer mix between enterprise and mid-market segments, especially with new product launches. He also asked about the competitive landscape for GenAI demand and the reason for the wider implied revenue guidance band for Q4.

Answer

Or Offer, Co-Founder and CEO, stated that the mix between SMB and enterprise customers has remained consistent. Maury Zlakovsky, Chief Business Officer, expressed confidence in Similarweb's dominant position in the GenAI space due to its unique dataset and client relationships, focusing on market growth rather than specific competitors. Or Offer confirmed that the wider Q4 guidance band is due to a strong pipeline of very big deals, and the company is confident in landing within the stated range.

Luke Horton of Northland Securities asked if there has been any shift in the customer mix between enterprise and mid-market segments, particularly with recent product launches and new use cases. He also inquired about the competitive landscape, specifically if there's an uptick in competition from other companies launching similar GenAI products, and the reason for the wider implied Q4 revenue guidance band.

Answer

Or Offer, Co-Founder and CEO, stated that no significant change in the customer mix between SMB and enterprise has been observed. Regarding competition, he expressed confidence in Similarweb's unique dataset and client relationships, viewing the GenAI space as an opportunity for market growth and education rather than a concern about specific competitors. He confirmed that the wider Q4 revenue guidance band is due to a strong pipeline of very big deals, allowing for flexibility in timing while maintaining confidence in the range.

Luke Horton of Northland Capital Markets questioned the pricing strategy for data licensing contracts, the expected future revenue mix from this stream, and the balance between new AI product development and sales execution.

Answer

Co-Founder & CEO Or Offer stated that data licensing deals are large, typically starting in the seven-figure range, with significant expansion potential. He noted strong demand across all three AI offerings, not just data licensing. Offer also explained that the strategy is combined, with AI agents being integrated into existing solutions to increase stickiness and value.

Luke Horton of Northland Capital Markets sought clarification on the full-year revenue guidance, asking if maintaining it despite the Graduate School USA divestiture constituted an effective guidance raise for the core business. He also asked for an update on the institutional consolidation timeline and its expected impact on marketing strategy.

Answer

CEO Angela Selden confirmed that maintaining revenue guidance while excluding five months of Graduate School revenue is effectively an increase for the core business. Regarding consolidation, she stated they are awaiting a final timeline from the Department of Education. The new structure will enable broader marketing through a system-level landing page while retaining local brands like Rasmussen and Hondros for targeted marketing. CFO Richard Sunderland added that while marketing is a shared service, lead sharing will be a new benefit.

Ben, on behalf of Luke Orton from Northland Capital Markets, asked for an update on the Cardlytics Rewards platform for non-bank partners and inquired about how the company is leveraging artificial intelligence (AI) across its business.

Answer

CEO Amit Gupta reported that the pilot for the Cardlytics Rewards platform is complete, with promising initial results in customer card-linking and redemptions, and a strong pipeline of prospective partners exists. Regarding AI, Gupta stated it is being implemented for engineering productivity and explored for advanced analytics, but these initiatives may be slowed to prioritize addressing the recent FI partner challenges.

Luke Horton inquired about the new AI and Enterprise product pipeline, specifically asking for the mix of existing versus new customers driving the growth to a projected $50M ARR. He also asked for an update on the competitive landscape and any notable geographic performance trends.

Answer

CEO Bill Wagner stated that the enterprise customer mix remains consistent with the previous quarter, with approximately 60% being upgrades and 40% new customers. He confirmed no significant changes in the competitive landscape. Wagner also noted that the geographic revenue split remains stable at roughly 50/50 between the U.S. and the rest of the world.

Luke Horton asked for details on the assumptions and segment-level trends behind the company's raised financial guidance, including any macro factors and performance in July.

Answer

CFO Jason Bengel provided a segment-by-segment breakdown of the updated outlook. The guidance assumes no change in interest rates. Key drivers include continued strength in home equity, stable performance in the consumer segment with encouraging signs from lenders, and a significant expected step-up in the insurance business in Q3, a trend already visible in July's results. Overall expenses are expected to remain consistent with Q2 levels.